Powell is about to step down - who will be the next "money printing chief"?

Author: Bernard, ChainCatcher

Powell's “countdown”, Trump lays out plans in advance

In May 2026, Federal Reserve Chairman Jerome Powell's term will officially end. However, the Trump administration's strategy has already begun—Trump and Treasury Secretary Besant are attempting to gain substantial control over monetary policy by taking control of the key voting rights of the Federal Reserve Board (FRB) before the first half of 2026. Currently, the Trump camp has secured three seats through Stephen Miran, who replaced Adriana Kugler, and board member Lisa Cook is facing pressure to resign due to allegations of mortgage fraud, leaving them just one seat short of a majority on the seven-member board.

From the proposal of the “shadow chairman” concept to the quiet layout of council seats, the game surrounding the control of the Federal Reserve is reshaping the future landscape of cryptocurrency. According to the two prediction platforms Polymarket and Kalshi, several candidates who are open to cryptocurrency are competing for this key position, and the market expectations for the next Federal Reserve Chairman have shown significant divergence: Kevin Hassett, Kevin Warsh, and Christopher Waller have become the top three candidates, with odds significantly ahead; other candidates like Bowman and Bessent have odds ≤ 1%; notably, Musk has also appeared on Polymarket's odds list, currently ranking last.

Three major popular candidates have emerged.

On September 5, Trump confirmed during an interview with reporters in the Oval Office that Kevin Hassett (Director of the White House National Economic Council), Kevin Warsh (former Federal Reserve Governor), and Christopher Waller (current Federal Reserve Governor) are his “top three” final candidates to replace Powell.

1. Kevin Hassett: Leading the predictions market

In the prediction market, current White House National Economic Council Director Kevin Hassett leads with a probability of 29% for Kalshi and 8% for Polymarket. This 63-year-old economist holds a significant position in Trump’s camp. He served as the Chairman of the Council of Economic Advisers from 2017 to 2019 and was one of the main architects of the Tax Cuts and Jobs Act during Trump’s first term, providing economic policy advice to Trump during the 2024 presidential campaign.

In terms of crypto positions, according to the financial disclosure submitted in June this year, Hassett holds Coinbase shares worth between $1 million and $5 million, which are compensation for his work as an advisor to Coinbase. His total assets amount to at least $7.6 million, including speaking fees from institutions such as Goldman Sachs and Citigroup.

In terms of monetary policy stance, Hassett is a typical dove. He has publicly criticized Powell's decision to maintain high interest rates multiple times, arguing that the Federal Reserve should take more aggressive steps to cut rates to support economic growth. Trump has repeatedly praised Hassett in the CNBC “Squawk Box” program this August, viewing the “Kevins” (Hassett and Walsh) as priority candidates for the position of Federal Reserve Chair.

2. Kevin Warsh: “Estee Lauder's Son-in-law”

Kevin Walsh ranks second with a probability of 19% at Kalshi and 13% at Polymarket, and his background is a perfect blend of Wall Street and Washington. In 2006, at the age of just 35, Walsh was appointed by then-President George W. Bush as a member of the Federal Reserve, becoming the youngest member in the history of the Federal Reserve. During the 2008 financial crisis, he served as a key liaison between the Federal Reserve and Wall Street, coordinating the sale of Bear Stearns to JPMorgan Chase and participating in the decision-making process for the collapse of Lehman Brothers.

Wash's personal background is equally noteworthy. His wife, Jane Lauder, is the heir to the Estée Lauder cosmetics empire, with a net worth exceeding $2 billion. His father-in-law, Ronald Lauder, is not only a longtime friend and former backer of Trump, but also the person who first proposed the idea of the United States purchasing Greenland during Trump's first term. This deep political and business relationship network gives Wash a unique influence in Washington.

On the attitude towards cryptocurrency, Walsh has shown a pragmatic yet cautious stance. He has previously invested as an angel investor in the algorithmic stablecoin project Basis and the cryptocurrency index fund management company Bitwise. In a 2021 interview with CNBC, Walsh stated: “In the current environment of significant changes in monetary policy, Bitcoin makes sense as part of a portfolio; it's gaining new life as an alternative currency. If you're under 40, Bitcoin is your new gold.” He also mentioned that part of Bitcoin's rise is due to a “bid shift” from gold, pointing out that Bitcoin's price volatility severely undermines its role as a reliable unit of account or a valid medium of exchange. Additionally, Walsh supported the United States issuing a Central Bank Digital Currency (CBDC) in a 2022 op-ed in The Wall Street Journal to counter China's digital yuan, a stance that drew criticism from the crypto community, arguing it could threaten decentralization.

3. Christopher Waller: A staunch supporter of stablecoins

Current Federal Reserve Governor Christopher Waller ranks third with a probability of 17% for Kalshi and 14% for Polymarket, and he may be the most crypto-friendly current Federal Reserve official. Waller has been a Federal Reserve Governor since 2020 and previously served as the research director at the St. Louis Fed, being an authority in the field of monetary economics.

Waller's support for stablecoins is particularly noteworthy. At the Wyoming Blockchain Symposium in August this year, he referred to the transformation of payment systems as a “technology-driven revolution” and clearly stated that “stablecoins have the potential to sustain and expand the international role of the dollar.” He believes that stablecoins, with their 24/7 availability, near-instant settlement speed, and unrestricted liquidity, have become especially useful financial tools, particularly in inflationary economies or areas with limited banking services.

Waller believes that stablecoins actually strengthen rather than weaken the global position of the dollar. In his speech at the “A Very Stable Conference” in February of this year, he compared stablecoins to “synthetic dollars,” complementing Bitcoin's “digital gold”. He also praised the recently passed GENIUS Act, considering it an important milestone in the regulation of digital assets in the United States, providing a foundation for the responsible expansion of stablecoins. Waller insists that innovation should primarily come from the private sector and opposes the Federal Reserve issuing a CBDC.

Other potential candidates

4. Michelle Bowman: A Reformer Rising from Within

Although there is only a 1% probability in the prediction market, the current vice chair of bank supervision at the Federal Reserve, Michelle Bowman, should not be overlooked. As a member of the Federal Reserve directly nominated by Trump in 2018, she was promoted to vice chair responsible for bank supervision in May this year and has a key voice in formulating stablecoin regulations.

Bowman has shown an open attitude towards cryptocurrencies. In a speech in August this year, she advocated that banks should support the wave of digital assets, and the Federal Reserve should provide rules that do not hinder the development of the industry. She specifically emphasized that “regulators must recognize the unique characteristics of these new assets and distinguish them from traditional financial instruments or banking products.” She even suggested that Federal Reserve employees should be allowed to hold a small amount of crypto assets in order to “achieve a working understanding of the underlying functions.”

Bowman believes that tokenization can facilitate faster ownership transfer, reduce costs, and mitigate “well-known risks,” with stablecoins “becoming fixed fixtures in the financial system.” She criticized the “overly cautious mindset” and advocated for a “pragmatic, transparent, and tailored” regulatory framework. At the FOMC meeting in September 2024, she voted against a substantial rate cut of 50 basis points, supporting a more moderate 25 basis point decrease, which has earned her the admiration of Trump.

5. Scott Bessent: The current Secretary of the Treasury, Bessent made it clear in a speech this July that “cryptocurrency is not a threat to the dollar, and stablecoins can actually strengthen the dollar's dominance.” Although he stated that he would not use Treasury funds to purchase Bitcoin, he supports using government-seized crypto assets to establish reserves, currently valued at approximately $15-20 billion.

6. Judy Shelton: Economist, Shelton's views may be the most disruptive. As a staunch advocate of the gold standard, Shelton has long criticized the excessive power of the Federal Reserve, even comparing it to the central planning system of the Soviet Union, arguing that the Federal Reserve's 2% inflation target is a disguised confiscation of the public's wealth. Shelton sees the alignment between the gold standard concept and cryptocurrencies, having stated “I like the idea of a gold standard currency, it could even be realized through cryptocurrencies.”

7. Roger W. Ferguson Jr.: Former Vice Chairman of the Federal Reserve, a voice representing the traditional financial establishment. Ferguson led the Federal Reserve's initial response during the 9/11 attacks, ensuring the normal functioning of the U.S. financial system. Ferguson has not publicly stated a clear position on cryptocurrencies, but he emphasizes the importance of maintaining the independence of the Federal Reserve and warns that political interference could undermine the United States' economic leadership.

8. Arthur Laffer: The father of supply-side economics, a famous creator of the “Laffer Curve” and one of the architects of Reaganomics. Laffer views Bitcoin as “private rules-based money,” similar to the gold standard, which can promote global monetary progress and aligns with the supply-side philosophy (reducing government intervention and promoting growth).

9. Larry Kudlow: Former Director of the White House National Economic Council, has a relatively cautious but gradually open attitude towards cryptocurrencies. Kudlow was viewed by the crypto community in 2019 as “the best argument for why we need Bitcoin” for criticizing Bitcoin. However, by 2022, he began warning on Fox Business Channel's program that “radical progressives will try to regulate digital currencies,” opposing excessive regulation of cryptocurrencies.

10. Ron Paul: Former Texas Congressman, highly regarded in libertarian and Bitcoin communities. Paul has gradually become a staunch supporter of Bitcoin, starting from a critical stance against the Federal Reserve. He claims that the only way to avoid recessions caused by the Federal Reserve is to encourage the use of alternative currencies like Bitcoin and to exempt cryptocurrencies from capital gains tax.

11. Chamath Palihapitiya: Billionaire, venture capitalist, and one of the most influential Bitcoin advocates in Silicon Valley. Palihapitiya once held a substantial amount of Bitcoin, and although he later regretted selling Bitcoin worth $3-4 billion, he remains a staunch supporter of cryptocurrency. He suggested that the government could use its Bitcoin holdings to launch a U.S. sovereign wealth fund, raising $50-100 billion through borrowing rather than selling Bitcoin.

12. Howard Lutnick: Current Secretary of Commerce and CEO of Cantor Fitzgerald. Lutnick's company is a major custodian for Tether (the issuer of USDT), holding tens of billions of dollars in US Treasury bonds to support USDT. His son, Brandon Lutnick, has also partnered with SoftBank, Tether, and Bitfinex this year to establish a $3 billion Bitcoin investment fund.

Although these candidates do not have high winning odds in the prediction market, their differing attitudes toward cryptocurrency reflect the diversity of U.S. policymakers' understanding of digital assets. From Bessen's vision of a “crypto superpower” to Paul's concept of monetary freedom, from Lutnik's business practices to Laffer's economic theories, each perspective provides unique insights into the potential future direction of the Fed's cryptocurrency policies. Personnel changes, policy loosening, and softened attitudes indicate that the Fed, which once made the crypto market “walk on thin ice,” is now re-engaging in dialogue with the industry.

Market expectations: Is the era of massive liquidity about to arrive?

Mike Novogratz, the CEO of Galaxy Digital, clearly stated in an interview with Kyle Chasse: “The next candidate for the Federal Reserve chair could be the biggest catalyst for a bull market in Bitcoin and the entire cryptocurrency space.” Novogratz predicts that if Trump appoints a “very dovish” Federal Reserve chair who significantly cuts interest rates when it shouldn't, the price of Bitcoin could reach $200,000. Meanwhile, BitMEX founder Arthur Hayes, in his latest article “Four, Seven,” has made an even more outrageous prediction that the price of Bitcoin will reach $3.4 million—if the Trump administration implements yield curve control (YCC) through the Federal Reserve, it could create up to $15.2 trillion in credit. Based on the historical correlation of “for every $1 of credit created, Bitcoin rises by $0.19,” Bitcoin could reach $3.4 million.

However, Novogratz also warned that this scenario is “really bad for the United States.” He believes that while this aggressive monetary policy is favorable for cryptocurrencies, the cost will be the loss of the Federal Reserve's independence and serious damage to the U.S. economy. Hayes also believes that the Federal Reserve will be forced to buy long-term government bonds on a large scale to lower interest rates, and regional banks will gain more lending space to support small and medium-sized enterprises. The scale of liquidity injection will far exceed that during the pandemic in 2020. This “quantitative easing for the poor 4.0” policy will transfer the credit creation power from Wall Street to the small and medium-sized banks on Main Street.

Conclusion: Waiting for the shoe to drop

As Novogratz said, the “political situation” has made it unprecedentedly difficult to predict the peak of the Bitcoin cycle. The changes in personnel at the Federal Reserve have never been just a bureaucratic procedure, but a catalyst for reshaping the entire crypto landscape. From the SEC's softened stance to the FDIC easing restrictions, from the approval of Bitcoin ETFs to the advancement of stablecoin legislation, every loosening of the regulatory environment is paving the way for the impending monetary policy upheaval.

Polymarket data shows that there is a 44% probability that Trump will not announce the next Federal Reserve Chair within the year, which means the market may have to wait several months to see the direction. However, looking at the backgrounds of the currently popular candidates, regardless of who ultimately takes over, they generally display a more open attitude towards financial innovation. This shift is not coincidental; an irreversible trend has formed: with BlackRock managing the largest Bitcoin ETF, Federal Reserve governors openly supporting stablecoins, and the Treasury Secretary stating that “cryptocurrency is not a threat to the dollar”—the highest halls of traditional finance have opened their doors to digital assets, and a more crypto-friendly regulatory era may be on the horizon. For the crypto industry, whoever ultimately takes over will need to be prepared to face the potential arrival of a “great easing era.”